US Inflation hits highest level for 40 years

As US inflation contiues to ride the up esculator, Dan Boardman-Weston, CEO and Chief Investment Officer at BRI Wealth Management, commented: “US inflation came in at 9.1% in June, compared to forecasts of 8.8% and core inflation crept ahead of expectations as well. Inflation is running at the highest level in 40 years due to large increases in the cost of energy and food (increasing by 41.6%, 10.4% and 5.5% respectively). Commodities have started to ease back over the last month and parts of the US economy look under increasing pressure, despite this we’re likely to see high readings over the coming months, albeit the rate may reduce from here.

“The significant increases in the cost of living and the interest rate increases are starting to have a detrimental impact on current and future growth for the American economy and this is likely to bring inflation meaningfully lower over the medium term. The Fed has a tricky task ahead of them trying to ensure that inflation expectations don’t become entrenched but they are likely to continue tightening policy into a slowing economy. The ‘softish’ landing they are hoping for continues to look like a big ask.”